Create an account and get free access to 50+ articles.
Sign up for free >>

BootCamp Articles

Articles read: 0/52

Revenue growth is one of the most popular strategy cases in a case interview

Usually, growth strategy cases are introduced by open-ended questions such as “A firm XYZ wants to increase their revenue. How should they go about it?”

Gather the necessary information about volume and price to determine the best growth lever

Case interviews with revenue growth cases can be tackled by influencing two major parameters that determine growth figures. These are volume and unit price. In order to make suggestions, once again, you need to understand the client’s business and the industry. Growth strategies can focus on a product, a division, or on the company as a whole. Areas you could investigate based on your hypothesis are:

Products

  • What is the client’s product mix? What is the lifecyle of each product?
  • What is the state of the respective industries? Are they growing?
  • Which product segments have the biggest potential?
  • What drives customer satisfaction?
  • How does the client’s sales growth rate compare to that of the competitors in the market?

Price

  • How are the client’s prices compared to that of competitors? For instance, if the product is a commodity, then prices should be similar.
  • What is the customers’ price sensitivity? If the product is a commodity, then customers are likely to be very price sensitive.

Marketing

  • What are the client’s marketing and sales channel activities? Evaluate their effectiveness.
  • What are competitors’ marketing and sales channel activities? Evaluate the effectiveness if they are better than the clients’ sales.

Financials

Choose a growth strategy and the growth vector you want to pursue

After having gathered this set of information, you will have got a feeling for the type of growth that is demanded. Based on this information, you can then decide which growth strategy to implement. Roughly, you can subdivide strategies into (1) organic growth and (2) inorganic growth. The categories can further be organized using an Ansoff matrix.

Find new customers by (Ansoff Matrix):

  • Increase/switch distribution channels.
  • Expand the product lines.
  • Enter new markets.
  • Perform a major marketing campaign.
  • Increase your share of wallet with your existing customers e.g. by selling them add-on/bundled products.
  • Lower customer churn rate by preventing unwanted customer attrition.
  • Acquire other companies.

If you have thoroughly completed this BootCamp, you will notice that many case types overlap with each other. You will rarely find a case that fits only one type. Most of the strategic decisions intersect. After completing the BootCamp, you should get a feeling for those connections and be able to see the big picture.

Check out Ocean´s pearl to practice a growth strategy case

6 Comment(s)
May 27, 2018 03:08 am -
Sarah

Did we get to figure out how to solve this out? And how to give recommendations on this?

I imagine it is really an issue-tree structure on main hypothesis of existing growth and where the company wants to go?

November 18, 2017 05:17 pm -
Sara

I agree with the comments, but also with the suggested structure. Depending on the problem the client is faced with, it can be suitable to start with a hypothesis (if it's plain clear what's the issue), examining product specifications, marketing efforts, customer satisfaction, competitors. Price and Financials can be either done right after the product specs, since it would then examine its price/costs and cashflow estimations and expectations of interested sides. In my opinion, there is no strict structure in a way how this should be solved, but it is important to stick to the idea and examine it in a logical way. As long as we don't make ourselves confused, the interviewer would be fine with our approach (that is, if correct and not crazy wrong) :-).

December 22, 2015 11:03 am -
Frank

Same thoughts here. I would not feel very comfortable to start with a hypothesis on which growth strategy solution to follow. First i would like to identify opportunities and therefore i'd like to take a look at 3 things. (1) The customers, (2) The competition and (3) The company itself. After identifying the main opportunity to increase revenues i would like to look at the growth strategy in terms of growing through either (1) products, (2) price or (3) marketing.

December 01, 2015 04:11 pm -
Falco

I share the feeling of Thomas in that it definitely doesn't seem to be very MECE or structured.

The questions are all quite valid and indeed, Ritika, they are not completely random (as they are grouped under Products, Price, Marketing and Financials). However, if you ask them in this order I can't imagine the interviewer will view it as very structured, because there is a better way to structure. If you compare this categorization with for example Customers, Company and Competition, the latter would be more suitable - also more suitable to find root cause/opportunity.

Only when coming up with solutions, Products, Price, Marketing and Financials might be a good structure.

February 06, 2015 09:50 pm -
ritika

Hi Thomas, thank you for the comment. The topics in the framework are somewhat comprehensive and which topics you would want to evaluate will vary from case to case. For example:- if the case is about a "special product" and you want to increase this products sales. You would want to first understand (1) what is the product and why is it special? (2) Even if the product is really good, is it something the customers really want? or customer satisfaction, and then (3) What are the competitors doing ? is the client missing out something?. As you can see, this framework is very linear and targeted towards solving that company's problem/achieving goals. What you ask and in "which order" , which is very important, will differ from case to case. I hope this helps?. Let us know if you have any follow up questions.

February 03, 2015 05:32 pm -
Thomas

I don't think this framework is very structured.
If I think about following this framework, from the interviewer's perspective this would look like jumping around too much.
You are saying you are looking at the product and then you start talking about customer satisfaction and the growth rate of the competitors.

Related consulting question(s)
Best answer so far out of 4 answers:
Currently non-active expert
Expert

Two frameworks here: 4 Ps (= price, place, product, promotion), or the Ansoff Matrix (grow with existing or new products in existing or new markets). Both are quite MECE. Word of caution however --... (more)

Best answer so far out of 4 answers:
McKinsey / Accenture / Got all BIG3 offers / More than 300 real MBB cases / Harvard Business School

Hi! It depends very much on the industry. In some cases (Growth strategy) I will use a broad structure, in others (e.g. “how to increase the excessive luggage revenues for an Airline”) I will use P... (more)

Hi Elisey, I would personally not recommend to use a single framework for all the so-called business situations (M&A, Entry, New product, Operations etc). Although this would help to more easil... (more)

Best answer so far out of 2 answers:
McKinsey Engagement Manager & BCG Consultant | Interviewer at McK & BCG for 7 years | Coached 50+ candidates secure MBB offers

Hi Anonymous, let me illustrate how I would approach the low-profits scenario that you are describing. You should start to clarify the profit expectations and how much the company is actually underpe... (more)

Best answer so far out of 2 answers:
McKinsey Engagement Manager & BCG Consultant | Interviewer at McK & BCG for 7 years | Coached 50+ candidates secure MBB offers

Hi Ekundayo, the central difference between these two "entities" lies in what they are focusing on. Organizational Performance Management This includes activities which ensure that an organizati... (more)

Related case(s)

Bain case: Asian lubricants producer

Solved 63.7k times
4.7 5 25859
| Rating: (4.7 / 5.0)

LubricantsCo, a very successful Asian premium producer of lubricants in their native region, would like to further increase their revenue and profit. The product range ranges from lubricants in the automotive sector (e.g. motor and gear oil) to industrial applications (e.g. fats, heavy-duty oils). ... Open whole case

Your client, large automotive OEM WyCar, has developed its first fully electric vehicle (EV) and introduced it as a pilot on the Austrian market last year. However, sales have been far below the expected numbers. The management has engaged you to support them in understanding the reasons and advise ... Open whole case

EY-Parthenon Case: Virtual Marketplace

Solved 5.4k times
4.2 5 146
| Rating: (4.2 / 5.0)

A leading online real estate marketplace in Germany – your-new-home.com – is struggling with stagnating sales after many years of high growth rates. In a preliminary project with Parthenon, the market environment has already been examined in detail – competitors, new entrants, customer needs, etc. ... Open whole case

Well Being health care

Solved 22.3k times
4.3 5 1341
| Rating: (4.3 / 5.0)

Your client is Well Being (WB), a private healthcare company based in Germany. Well Being operates 10 hospitals in Germany (in comparison to 1,000 public hospitals). These hospitals are normally half the size of the public ones and are not providing Accident and Emergency (ER). Revenue comes ... Open whole case

Ocean's Pearl

Solved 14.2k times
4.5 5 274
| Rating: (4.5 / 5.0)

Your client is the captain of the pirate ship Ocean’s Pearl. He currently discovered declining cash reserves. The recent operations of his ships are not meeting his requirements and he is looking for options to generate additional cash. He wants us to solve two problems: Assessing the re ... Open whole case